State budget lean for Valdez projects

Valdez projects in Gov. Sean Parnell's proposed $12.4 billion state budget was a "short read" according to John Hozey, city manager.

He told the Valdez City Council Monday night that Valdez projects were not included in the proposed 2014 budget released last Thursday.

Ongoing project previously funded are included.

While austerity measures were expected by state officials after state revenue forecasts fell short for 2014, city officials were none-the-less disappointed at Parnell's proposed spending.

Parnell's proposed $12.4 billion state budget would require using $1.1 billion in savings to balance before legislators get to work on it.

The legislature opens January 21, 2014 and runs through April 20.

In an interview conducted before the governor's budget was published, Rep. Eric Feige, who represents Valdez and District 9 in the Alaska House, said cuts to the state budget were to be expected due to low revenue forecasts, but said prefunded projects already approved by the legislature will move forward.

"I don't think we're going to see drastic reductions," he said, "There's a lot of money that hasn't been spent yet."

While Alaskans scramble for their piece of the pie, Feige said there is more to look towards in the upcoming session.

"There's probably going to be some kind of gas legislation," he said, especially in light of the announcement made earlier this year that the oil producers were favoring an in-state natural gas line that would likely end in Nikiski, rather than Valdez.

"Right now, it's a 70 to 80 percent chance the pipeline will end up in Nikiski," Fiege said, noting that he had worked hard to include verbiage mandated natural gas off-take points in last year's HB 9.

Feige said he expects to see discussions or possibly legislation that will spell out what level of equity Alaska will hold in any proposed natural gas line.

He said he will be working to include an off-take for natural gas that will benefit residents of the Copper Basin and Valdez.

"We are a long ways from a final investment strategy," Feige said, but he does expect significant steps forward in that process during the legislative session.

Feige also said he will be in Valdez the week of January 6, when city officials are slated to meet with Steve Butt, the senior project manager working with TransCanada, BP, ExxonMobile, and ConnocoPhillips on the natural gas line project.

As far as budgeting goes for a whole, Feige said he expects to see leaner spending in the future.

Valdez Star file photo

Rep. Eric Feige will be visiting Valdez in early January and meet constituents at the LIO, like he has many times in the past, such as he did in this photo from March, 2012.

"What we're going to see over the next couple of years is the trimming of the fat," he said.

The Associated Press reported last week that two elements of Parnell's 2015 budget proposal expected to generate debate during the upcoming legislative session are education and his plan for addressing the state's $12 billion pension shortfall.

Parnell proposes transferring $3 billion from a reserve fund to help pay down the pension obligation. His budget office said that approach could save the state more than $2 billion over the long run. While some Democrats have expressed support, House Speaker Mike Chenault, R-Nikiski, said he didn't know if the Legislature would support it.

Parnell's budget increases total funding for education by 0.6 percent, which House